Persistent inflation in Chile, Colombia and Venezuela In both Chile and Colombia, countries with inflation targets, November inflation maintained the annual rate close to the upper limit of the target range (2-4% for both countries). In the case of Chile, the increase of 0.3% m/m was mainly due to higher prices of food and services. In Colombia, despite the adverse weather conditions, there was no significant increase in food prices, which were up 0.14%. Meanwhile, in Venezuela a big rise in food and drink prices pushed up inflation to 2.2% in November, and to 27.6% y/y.

Economic activity growth slows in Chile The Monthly Economic Activity Index (Imacec) slowed in October to growth of 3.4% y/y, below our expectations and those of the market, and fell 0.6% m/m. In line with last week’s figures by sector, the strength of retail trade was more than offset by the fall in industrial activity and the low growth rate in mining. This figure introduces a downward bias to the growth estimate of 6.5% y/y for the year.

Growth remains flat in 3Q in Brazil, lowering the forecast for 2011 GDP growth in the third quarter remained flat in quarterly terms, leaving annual growth at 2.1%. These figures can be explained by a slowdown in all the components of domestic demand: private consumption, fixed capital formation and public expenditure. As a result, the market growth forecast for 2011 has been hovering between 2.8% and 3%.

Central Bank maintains the interest rate at 4.25% in Peru For the seventh month in a row, the Central Bank kept its monetary policy rate unchanged. This decision aims to balance the slowdown in demand at a local level and international financial risks with the fact that the yearly inflation rate is above the target range.

New economic authorities in Argentina and Chile ensure continuity The cabinet members taking office for President Cristina Fernández’s second term have been announced. The main feature is that only three are new, replacing members who moved to the legislature. In Chile, President Sebastián Piñera appointed Rodrigo Vergara as chairman of the Central Bank, replacing José De Gregorio, who ended his term. As was the case with his predecessor, Vergara’s appointment suggests that autonomy in monetary policy will be maintained.